Limited Access Order and Violence:

Pakistan’s Development Dilemma

Haris Rehman
University of Illinois at Urbana-Champaign
Introduction

 Governance deficiencies and poor development have long vexed

Pakistan
 Short episodes of growth followed by longer periods of dismal
economic performance
 Elites maintain stability by limiting access to and control of
valuable resources (such as land and capital) and valuable activities
(such as contract enforcement and political process)
 Military rules
 Hereditary politics have led to a strong monopolistic political-
networking whereby political power has concentrated into a few
families
 Best described by Limited Access Order (LAO)
 The Framework
 To answer puzzles of development, we need to understand structure of
economies and polities and the sources of change.
 Limited Access Orders: Solve the problem of violence by granting
political elites privileged control over parts of the economy, each
getting some share of the rents.
 Since outbreaks of violence reduce the rents, elite factions have
incentives to refrain from violence most of the time.
 Stability of the rents and thus of the social order requires limiting
access and competition.
 Open Access Orders: Control the problem of violence through open
access and competition
 (North, Wallis, Webb and Weingast, 2011)
 LAOs and Institutions
 LAOs are marked by absence and/or failure of impersonal institutions.
 LAO societal structure are built around personalities and power circles rather
than institutions, laws and systems.
 Growing consensus that long run economic as well as political
development depends primarily on improving institutions.
 World has witnessed many development failures in spite of abundant
capital & natural resources, and educated populations, who emigrate or
stagnate if institutions do not put them to good use.
 The creation and structuring of rents and capacity of violence are the heart
of limited access orders.
 LAOs are not static, they progress across a spectrum:
Fragile – Basic – Mature
I. Partition and Crisis of a Fledgling State:
The Formative Years, 1947-1958

 Birth of Pakistan in 1947

 Post-independence Refugee and economic crisis
 Constitutional crisis
 Power sharing disagreements between East and West Pakistan
 Military takeover of 1958
 Basic LAO with risk of fragility
II. Military Authoritarianism
(1958-1971)
 Military-bureaucratic coalition controls rents
 Electoral “Basic Democracy” with limited entry
 Industrial growth based on rents from infant industries but low
economic efficiency
 Unequal access for East Pakistani elites
 Victory of East Pakistani Awami League (AL) in the 1970 elections
leads to mutiny and separation of East Pakistan when West
Pakistan’s elites prevent formation of AL government.
 Largely Basic LAO ending in a Fragile one
III. Populist Authoritarianism
(1972-1977)
 Fledgling dominant party begins to lose control while attempting
to exclude the existing dominant coalition
 Government appropriations and nationalization create fears among
asset owning class, undermine economy
 Widespread agitation and violence as opposition rejects 1977
general election results
 Attempt to personalize LAO in the form of Bhuttoism fires back
and results in military coup.
 Basic LAO with fears of fragility
VI. Theocratic Military Authoritarianism
(1977-1987)

 Rent distribution within bargaining groups and individuals under

the military authoritarian leadership
 Religion introduced as a key factor in the new LAO dynamics for
the very first time
 Liberalization, restructuring and redistributive policies
reinvigorate capital accumulation and growth
 Global rent allocation in wake of Afghan War
 Basic LAO with signs of maturity
 The Islamization Effect

1970* 1977** 1985**

Election Year % of % of % of
MPs MPs MPs
total total total
Socialists 15 10.7% 83 29.4% 17 6.1%
Liberal /
106 75.7% 175 62.7% 167 59.6%
Moderate
Religious 19 13.6% 22 7.9% 96 34.3%

* West Pakistan results only. ** Including Senate

V. Dreadful Decade of Democratic
Interregnum: (1988-1999)

 Two-party elected governments under backhand control of

dominant coalition and military
 Political crises, violence and toppled governments as ‘live and
let live’ compromises between competing factions collapse
 Poor economic performance lessens rents
 Political in-fighting, authoritarian orientation, strict barriers
to entry regress the LAO to fragility
 Fragile LAO
 Elected Kingdoms!

1989-90 1990-93 1993-96 1997-99

MPs for 2nd time or more 39% 44% 63% 71%
Ministers for 2nd time or more 48% 37% 81% 85%
MPs/Ministers whose relatives
59% 67% 78% 82%
also remained MPs/Ministers
No. of MPs/Ministers* Relative
6/4 11 / 7 8/5 15 / 9
of PM

* Also include Advisors to PM and Chairpersons of PM’s task forces.

VI. Military Authoritarianism and Rise of
Militant Organizations: (2000-2007)
 Civil-Military bureaucracy nexus, technocrats and industrialists
form the dominant coalition
 Alternate political elites raised under ‘grass-root democracies’ and
devolution program
 Global rents from second Afghan war
 Civil service, police, revenue collection reforms
 Some progress towards mature LAO; judiciary, media, civil society
given liberties
 Swift rise of religious and Baloch nationalist violent groups poses
serious challenge to LAO
 Basic LAO ending in fragility
VII. Competitive Populism
(2008 - )
 Multiparty democracy but still dominance of few powerful
politico-economic families
 Lowest control by military-establishment ever
 Judicial activism, media adventurism with a proactive civil society
at the cost of other institutions
 Excessive rent seeking, poor governance and self-centric policies
waste opportunities of progress
 Personal forms of political organization perpetuate LAO rather
than progress to OAO
 Basic LAO vulnerable to fragility
 Growth Comparisons

GDP Mfg. Industry Agri. Serv. CPI

1951-55 4.2 9.5 11.5 2.4 N.A N.A

1956-60 6.4 8.5 8.6 0.3 N.A N.A
1961-65 7.2 10.6 17.4 3.2 7.6 2.2
1966-70 7.1 5.3 7.7 2.8 6.2 4.5
1971-77 3.6 3.8 4.7 1.7 5.7 13.9
1978-88 6.9 9.2 8.6 4.0 7.3 7.2
1989-99 4.0 4.3 4.7 4.4 4.5 9.6
2000-07 5.1 8.7 6.6 3.4 5.5 5.7
2008-13 2.8 1.9 2.9 2.4 3.8 13.2
 Two Different Worlds!

Sitting on a gold embroidered and plated sofa in his multi million dollar private
palace near Lahore, third time Prime Minister Nawaz Sharif vows to never allow
Pakistan fall to dictatorship again and go to every length to protect ‘democracy.’
 Two Different Worlds!

Facing 16 hours of power shutdowns, people fight scorching heat the same day in a
canal passing down the same Lahore city.
 Conclusion
 Pakistan inherited a basic LAO on independence but human, political and
economic crises posed threat of fragility
 Absence of power sharing formula between East and West wings caused
inter-elite conflicts, ultimate separation of East Pakistan
 Power has oscillated between military and civilian regimes but none has
been able to provide sustainable stability
 Relative stability and higher economic growth in military regimes but all
ended in violence, chaos and fragility
 Elected regimes marked with political instability and poor economic
performance
 Concentration of political power in some families restrict entry, curb
institutional development and perpetuate LAO!
 Persistent denial of access results in religious and separatist violent groups,
that in turn, keep the LAO fragile